CCM Contract Administration 2 — Questions and Answers
Question 1: What is the primary purpose of a Notice to Proceed (NTP) in construction contract administration?
- To formally authorize the contractor to begin work on a specific date (Correct answer)
- To notify subcontractors of their scope of work
- To confirm receipt of the contractor's bid bond
- To establish the project's substantial completion date
Correct answer: To formally authorize the contractor to begin work on a specific date
An NTP is an official document from the owner or CM that authorizes the contractor to commence work, establishing the contract start date for schedule and liquidated damages purposes.
Question 2: Under AIA contract documents, who has the authority to interpret contract requirements and resolve disputes during construction?
- The general contractor's project manager
- The architect or engineer of record (Correct answer)
- The construction manager at-risk
- The owner's legal counsel
Correct answer: The architect or engineer of record
Under AIA A201, the architect is the initial decision-maker for interpreting contract documents and resolving claims between owner and contractor.
Question 3: A contractor submits a claim for additional compensation due to differing site conditions. Under FAR (Federal Acquisition Regulation), what must the contractor demonstrate?
- That the conditions were foreseeable at the time of bidding
- That the actual site conditions differed materially from what the contract indicated (Correct answer)
- That the owner failed to conduct adequate subsurface investigations
- That the delay caused by conditions exceeded 30 days
Correct answer: That the actual site conditions differed materially from what the contract indicated
A Type I differing site condition claim requires proof that actual conditions varied materially from those indicated in the contract documents.
Question 4: Which document formally incorporates changes to the contract sum and contract time after the owner and contractor agree on a change?
- Request for Information (RFI)
- Construction Change Directive (CCD)
- Change Order (CO) (Correct answer)
- Supplemental Instruction
Correct answer: Change Order (CO)
A Change Order is the executed agreement between owner and contractor that modifies the contract sum, contract time, or scope, and becomes part of the contract.
Question 5: What is the significance of the 'time is of the essence' clause in a construction contract?
- It allows the owner to accelerate work without additional cost
- It makes contract completion dates enforceable and material to the contract (Correct answer)
- It prevents the contractor from claiming weather delays
- It limits the contractor's right to request extensions
Correct answer: It makes contract completion dates enforceable and material to the contract
A 'time is of the essence' clause makes scheduled dates material contract terms, meaning failure to meet them constitutes a material breach subject to remedies including liquidated damages.
Question 6: During contract administration, a CM identifies that the contractor is performing work that deviates from the contract drawings. What is the CM's FIRST action?
- Issue a stop-work order immediately
- Notify the owner and recommend corrective action
- Issue a written nonconformance notice to the contractor (Correct answer)
- Deduct the defective work cost from the next pay application
Correct answer: Issue a written nonconformance notice to the contractor
The CM should first issue a written nonconformance or deficiency notice to document the deviation and formally direct the contractor to correct the work.
Question 7: What does 'substantial completion' legally signify in a construction contract?
- All punch list items have been completed and the owner has taken occupancy
- The work is sufficiently complete for its intended use even if minor items remain (Correct answer)
- The contractor has submitted all closeout documentation to the owner
- The certificate of occupancy has been issued by the authority having jurisdiction
Correct answer: The work is sufficiently complete for its intended use even if minor items remain
Substantial completion means the work is complete enough that the owner can use it for its intended purpose; it triggers transfer of insurance responsibilities and starts warranty periods.
CCM Contract Administration 2
What is the primary purpose of a Notice to Proceed (NTP) in construction contract administration?